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Idaho Gov. Otter: Don't repeal the grocery tax

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BOISE, Idaho (AP) — Gov. C.L. "Butch" Otter says Idaho lawmakers should not repeal the state's grocery tax, adding that he sees no reason to change the current system.

Otter sent a letter to House Speaker Scott Bedke and Senate President Pro Tem Brent Hill Thursday stating his opposition just after the Senate surprised legislative leadership by rewriting a tax cut plan to repeal the 6 percent sales tax on groceries. The proposal still needs to clear both the House and the Senate before the Idaho Legislature hopes to adjourn by March 24.

Thirty-seven states currently do not tax groceries. In Idaho, the grocery tax is offset with a $100 credit available to families when they file their taxes.

The Republican governor stopped short of saying he would veto any grocery tax repeal proposal that came across his desk.

In the debate over what kind of tax relief to give Idahoans this session, the Senate voted Thursday to shift gears and support repeal of the grocery tax.

Sen. Cliff Bayer, who led the charge for grocery tax repeal, says it gives the biggest tax relief to the most people.

"It means a lot of things," the Meridian Republicantold KBOI 2News. "It's a nice tax relief that hits Idahoans in a very equitable way."

House Majority Leader Mike Moyle was the driving force behind the $51 million tax cut plan that was sent to the Senate -- and essentially rebuffed.

Moyle has supported grocery tax repeal in the past but not this year.

"I think when you look at Idaho income tax rates and how we're the fourth highest west of the Mississippi, we need to lower those to become more effective in drawing business to state of Idaho," Moyle mtold KBOI 2News.

And now Gov. Otter has chimed in with his letter saying "removing the sales tax on groceries would reduce general fund revenue by almost $194 million...the reduction would make it more difficult to meet our commitments to improving Idaho's education system."

Bayer's amendment also removes the grocery tax credit, aimed at offsetting the burden of paying taxes on food.

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Scott Logan, KBOI 2News contributed to this report.

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